NextEra Energy, owner of the Duane Arnold Energy Center, says it will retire Iowa's lone nuclear plant in late 2020, five years earlier than anticipated.

The Florida-based utility said Alliant Energy, the plant's largest power user, has agreed to pay NextEra $110 million to shorten its agreement to purchase power from Duane Arnold.

Alliant said it will partially replace the nuclear energy with wind energy from NextEra and expects new energy deals will save Iowa customers nearly $300 million over 21 years, even after the utility pays NextEra to end its contract early.

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A new wind turbine blade is installed during MidAmerican Energy Company's repowering of their Century wind farm on Wednesday, Nov. 8, 2017, in rural Blairsburg. (Photo: Kelsey Kremer/The Register)

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MidAmerican Energy Company is repowering its oldest wind farms to extend their life by another 20 years.
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Alliant Energy's plan must go through the Iowa Utilities Board for approval. Duane Arnold, which is located near Cedar Rapids, was licensed to operate until 2034.

NextEra said the plant employs about 500 people.

"We are committed to minimizing any impact today's announcement may have on them, their families and the community they call home," NextEra CEO Armando Pimentel said in a statement.

NextEra expects a gradual reduction in staffing at Duane Arnold over the next seven years as the decommissioning process takes place. The company said it will provide employees with severance packages and job training, among other benefits, and partner with Alliant and other utilities to find new jobs for laid-off workers.

"As we proceed into the next decade, several hundred jobs will remain at the plant for a number of years as a result of what will be a lengthy decommissioning process, along with the creation of new jobs through our continued investment in Iowa," Pimentel said.

A minority owner in Duane Arnold said it's "cautiously optimistic" the deal will save money for the rural electric cooperative members it serves.

"We believe long-term this will be a net benefit," said Bill Cherrier, CEO of Central Iowa Power Cooperative, a generation and transmission electric cooperative that owns 20 percent of Duane Arnold.

Cherrier said the cooperative, which gets 35 percent of its energy from Duane Arnold, must assess the costs to replace the energy, along with debt tied to the plant, before getting a full picture of the impact on consumers.

"Replacing one-third of our energy portfolio will not occur overnight," he said.

Cherrier said low-cost natural gas and the declining cost of renewable energy such as wind and solar have created challenges for nuclear power generators.

NextEra said it plans to invest about $650 million in existing and new renewable energy generation in Iowa by the end of 2020. That includes a $250 million investment to repower four wind facilities, providing about 340 megawatts of electricity for Alliant's Iowa customers.

Repowering these facilities is expected to create 200 new construction jobs, NextEra said, and will extend payments to landowners and tax revenues for local communities for decades.

NextEra said it's evaluating redevelopment opportunities at Duane Arnold, including the "construction of new solar energy, battery storage or natural gas facilities."